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Kentucky firm to repay $1.3 million to Texas customers to settle suit by Texas attorney general

Kentucky firm to repay $1.3 million to Texas customers to settle suit by Texas attorney general

A Kentucky-based direct-sales firm has agreed to repay as much as $1.3 million to Texas customers to settle a lawsuit filed by the Texas attorney general's office that accused it of deceptive trade practices.

Fortune Hi-Tech Marketing was accused of operating a pyramid scheme that, for $299, sold purchasers a chance to receive profits in the future by enrolling other consumers into the plan.

Fortune claimed to offer discounts on various products and services through relationships with major vendors.

"Fortune Hi-Tech's customers complained that the defendant falsely represented the earnings they would achieve if they became one of the defendant's independent representatives," the attorney general's office said in a news release.

Fortune admitted no wrongdoing as part of the settlement. Edward Burbach, an Austin attorney representing the company, said the attorney general's office found no evidence of an illegal pyramid scheme or deceptive trade practices. He said Fortune agreed to the settlement "to bring the inquiry to a close and, thus, avoid unnecessary attorneys fees."

Fortune has also faced legal challenges in Montana and North Dakota. In Montana, the company agreed to a settlement requiring it to pay $1 million in refunds.

The Texas settlement prohibits Fortune from engaging in deceptive trade practices in Texas and requires the company to refund qualified Texas customers the $299 fee, up to $1.3 million. The company must also pay $200,000 in attorney fees to the attorney general's office.

The repayments to Texas customers would be reduced by any amounts the customers earned from Fortune, according to the settlement.

Texas customers must submit a claim by Nov. 28, according to the settlement. Claim forms can be obtained from the attorney general's Consumer Protection Division.